Afternoon Coffee: Siemens to Buy Mentor Graphics, Obama Gives up on TPP

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Siemens announced Monday it is acquiring Mentor Graphics, an Oregon-based provider of product lifecycle management (PLM) software. The $4.5 billion deal adds to Siemens’ digital portfolio capabilities seen as essential for the next wave of high-tech manufacturing, such as smart products required in autonomous vehicles.

Siemens is one of several large industrial companies looking to expand their footprints beyond the physical supply chain to the digital realm. As Spend Matters Chief Research Officer Pierre Mitchell put it, “Bricks are buying clicks.”

The Death of TPP

The Obama administration’s signature trade deal effectively died Friday, after Congress said it would not advance the Trans-Pacific Partnership in the aftermath of the U.S. presidential election, the Wall Street Journal reported.

The deal’s collapse will likely appease growing anti-trade sentiment in the U.S. but also leave an opening for China, which was absent from the 12-nation pact, to assert itself in the booming economic region. The news comes at a critical time in global trade for China, as it faces the prospect of new tariffs from the incoming Trump administration and a battle among World Trade Organization members to attain market economy status.  

Copper Turns a Corner

The market for copper officially entered a bull market last week, with prices rising 14% over three days. Buyers may be tempted to link the sudden price jump with the election news, but the red metal began breaking upward even before Tuesday’s historic upset, MetalMiner’s Raul de Frutos said.

Most likely, investors are pouring money into base metals due to strong Chinese demand. Chinese demand from infrastructure and construction has been robust this year and the release of new manufacturing PMI data confirmed strong demand. The Caixin manufacturing PMI for October rose to 51.2, the highest reading since July 2014. That handily beat market expectations.”

Samsung Buys into Cars

And finally, Samsung has agreed to buy Harman International Industries, which makes connected car and audio systems. The deal marks an $8 billion pivot by the South Korean company after the disastrous launch of its Galaxy Note 7 smartphone, which had the unfortunate propensity to suddenly catching fire.   

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